DENVER | Main Development Thread #6

[Scottk]

Originally Posted by TakeFive

White Lodging already owned the site at 15th and California and now that their dual-branded Hyatt is nearing completion they've broken ground for their new 20-story dual-branded Le Meridien/AC Hotel project.

I am starting to really get sick of the massive blank walls that come with every single white lodging hotel in Denver. Ken at Denverinfill has already indicated that the new Le Meridien will have a massive blank wall facing the convention center.


Lame.

[Denverite]

Originally Posted by CherryCreek

In this case, only the headline is wrong. The story doesn't claim that marijuana is the source of the real estate boom in Denver, only that marijuana production is the key factor driving up the cost of industrial real estate space. THAT is true, and nobody watching the local industrial space market would quibble.

Agreed - on both points.

Originally Posted by Scottk

I am starting to really get sick of the massive blank walls that come with every single white lodging hotel in Denver. Ken at Denverinfill has already indicated that the new Le Meridien will have a massive blank wall facing the convention center.
Lame.

Also agree. It seems that the reasoning is that future development will, at some point, block any view so why bother with providing windows or other features, but I, for one, have always been bugged by this practice. I get it, but the property owner could maybe do something to these blank walls in the interim. The Denver Pavilions backside along 15th has driven me nuts for years (maybe it's different now? But for a long time, those blank walls above the parking lots were underutilized and ugly).

[DownhomeDenver]

Originally Posted by bunt_q

Jesus man, put down the bong and just google the thing. It's basically the most spectacular building Denver ever lost. Now, you wouldn't know that. But if you knew how to work the googles you'd have an inkling.

More like Jesus H Christ! I'm so glad you said it and not me.

Honestly, how many times have we lamented over the lost Opera House??!?!

I seriously would love to destroy the a-hole who thought it was a good idea to tear it down.

By the way, I am NOT backing down on what I think of Block 162. I don't care what Evan did for that block by saving the Fontius etc. Denver deserves better than this. And this is coming from the guy who doesn't have a thorn in his ass about 5 story stick built apartments.

And fuck Target. They wanna waste their money on buying into Canada and then failing miserably when they could've had a store in downtown Denver for years now--screw em. I'd rather see another retailer open downtown than them. How you like dem apples Target??? You betcha!

[bunt_q]

Downtown Walmart!

[Cirrus]

Originally Posted by bunt_q

Downtown Walmart!

It happens.

[TakeFive]

Originally Posted by Cirrus

It happens.

That's a pretty snazzy looking Walmart.

Not sure how Walmart is doing with their smaller format and urban stores.

After last week's earnings report and guidance their stock tumbled to where for the first time they're now worth less than Amazon. Amazon, though, does a lot of cloud hosting along with their retail operation.

Walmart "warned" of a three year window for heavy reinvestment. They've been having troubles executing in a number of areas. Primarily they feel a need to better compete with Amazon with their own online platform. Not sure if that means more distribution centers or what.

Originally Posted by DownhomeDenver

By the way, I am NOT backing down on what I think of Block 162. I don't care what Evan did for that block by saving the Fontius etc. Denver deserves better than this. And this is coming from the guy who doesn't have a thorn in his ass about 5 story stick built apartments.

I don't know the contractual arrangement with the Patrinely Group/Crimson Advisors on the office building but my guess is it could be a long time before that breaks ground.

There's easily more than two million square feet that will need to be absorbed given the new space in DUS neighborhood, the two new towers on 14th and 15th street plus there's been a sizable amount of contraction of oil & gas space that is presumably available for sublease, not to mention that Republic Plaza is still trying to lease up their building.

Of course if they could come up with a significant tenant lease the story could change quickly so you never know I guess.

[rds70]

Originally Posted by Scottk

I am starting to really get sick of the massive blank walls that come with every single white lodging hotel in Denver. Ken at Denverinfill has already indicated that the new Le Meridien will have a massive blank wall facing the convention center.


Lame.

Not true. The facade facing the convention center will have vision glass above the 3rd floor. Here is a piece of the approved elevations:



You can see where it lists vision glass above the 3rd floor.

[Scottk]

Originally Posted by rds70

Not true. The facade facing the convention center will have vision glass above the 3rd floor. Here is a piece of the approved elevations:



You can see where it lists vision glass above the 3rd floor.

Thank you for sharing this. I am glad to admit that I was wrong.

I was just going off of Ken's blog post last month. No blank walls on any side of the building??

[Scottk]

Originally Posted by TakeFive

There's easily more than two million square feet that will need to be absorbed given the new space in DUS neighborhood, the two new towers on 14th and 15th street plus there's been a sizable amount of contraction of oil & gas space that is presumably available for sublease, not to mention that Republic Plaza is still trying to lease up their building.

The way denver is booming right now has me feeling like we are due for a serious recession.

The news out of China and the euro zone has not been good.

The situation in the Middle East is looking even worse.

I think about the last time denver was booming like this.....it was the early 80s and 2007.

We all know what happens next.

[TakeFive]

Originally Posted by Scottk

The way denver is booming right now has me feeling like we are due for a serious recession.

The news out of China and the euro zone has not been good.

The situation in the Middle East is looking even worse.

I think about the last time denver was booming like this.....it was the early 80s and 2007.

We all know what happens next.

Just How Bad Was the 2009 Global Recession? Really, Really Bad
October 20, 2015 by Andrew Mayeda, Bloomberg Business

The global recession that followed the financial crisis was the most severe in half a century, an unusually synchronized shock that paralyzed trade and left 23 million more people out of work.

And the world may be on the edge of another recession, even though it hasn’t recovered from the last one. Those are the conclusions of a new book on business cycles released Tuesday by the International Monetary Fund.

For us, tech has been a big driver and Venture Capital has been feeding that sector. I do sense some slowdown in VC funds into startups as they look more to sort the losers from the winners and ride those to hopefully big paydays.

Bloomberg Business also carried the story about home builder confidence reaching a ten year high most noticeably out west according to the The National Association of Home Builders/Wells Fargo sentiment gauge.

I sense that Denver's economy is leveling off even if the the stats don't yet indicate that. There's always a lag of reporting to what is current or trend changes.

Capital will continue to flow into real estate. I expect Denver to see more multifamily development in the suburbs next year especially with new transit in mind. I also anticipate announcements about new tracts of land being developed for residential with more varied price points than what has been available. Building the needed infrastructure will take some time of course.

Nervousness abroad will mean more foreign capital flowing into U.S. Treasuries holding interest rates down regardless of what the Fed does. Foreign capital flows will also seek out real estate investments. The key is that cities like Denver are not over-supplied; quite the contrary as most have tight housing markets.

[seventwenty]

Downtown Denver Partnership is speaking about the 16th St Mall this morning. Hopefully one of us was there.

[Stonemans_rowJ]

http://www.newrepublic.com/article/123084/green-rush-and-denvers-housing-crisis

Carrie Makarewicz, an urban planning professor at the University of Colorado Denver, on the other hand, doesn’t think the presence of the marijuana industry has a lot to do with the current housing crisis. High costs of living in coastal cities like Boston, New York, San Francisco, and L.A., Makarewicz says, have prompted higher-paid workers to leave oceanside homes for second-tier cities like Denver, And millennials are also moving in droves—for jobs in tech, oil and gas, and other industries, perceived high quality of life, and “recreational opportunities.”

At a time of massive migration, Denver also faces a shortage of low to mid-price housing. For Makarewicz, Colorado’s condo defects legislation, which says that condo owners can sue the developers over construction deficits, has deterred builders from creating anything but luxury condos. Housing costs continue to soar, and wages for workers remain stagnant. Colorado’s minimum wage is just $8.23 per hour, while in 2014 the average Denver resident needed to earn at least $35 an hour to afford to live in the city, according to a Zillow study.

[CherryCreek]

Originally Posted by Stonemans_rowJ

http://www.newrepublic.com/article/123084/green-rush-and-denvers-housing-crisis

Carrie Makarewicz, an urban planning professor at the University of Colorado Denver, on the other hand, doesn’t think the presence of the marijuana industry has a lot to do with the current housing crisis. High costs of living in coastal cities like Boston, New York, San Francisco, and L.A., Makarewicz says, have prompted higher-paid workers to leave oceanside homes for second-tier cities like Denver, And millennials are also moving in droves—for jobs in tech, oil and gas, and other industries, perceived high quality of life, and “recreational opportunities.”

At a time of massive migration, Denver also faces a shortage of low to mid-price housing. For Makarewicz, Colorado’s condo defects legislation, which says that condo owners can sue the developers over construction deficits, has deterred builders from creating anything but luxury condos. Housing costs continue to soar, and wages for workers remain stagnant. Colorado’s minimum wage is just $8.23 per hour, while in 2014 the average Denver resident needed to earn at least $35 an hour to afford to live in the city, according to a Zillow study.

The whole "marijuana" is driving up housing prices claim is so spurious. . As you note, need $35 hour to afford to live in the City. Exactly how many $35 hour jobs has the marijuana boom created?

There indeed may be a good number of pot smokers who've been attracted to the "mile high" live style. Not many of those toking millennials are bringing in $35 an hour plus.

[wong21fr]

Originally Posted by TakeFive

TI don't know the contractual arrangement with the Patrinely Group/Crimson Advisors on the office building but my guess is it could be a long time before that breaks ground.

There's easily more than two million square feet that will need to be absorbed given the new space in DUS neighborhood, the two new towers on 14th and 15th street plus there's been a sizable amount of contraction of oil & gas space that is presumably available for sublease, not to mention that Republic Plaza is still trying to lease up their building.

Depends on what kind of money is behind the office component. If it's an REIT or RE fund then you could see the the project break ground spec as a long-term investment vehicle given their lower carrying costs. If it's an entity with a shorter investment horizon, pre-leasing would be necessary. USAA Real Estate isn't a Hines, though they do control $12B in real estate assets, and if they're involved then perhaps this project is a lot closer to groundbreaking then you allude.

[TakeFive]

Originally Posted by wong21fr

USAA Real Estate isn't a Hines, though they do control $12B in real estate assets, and if they're involved then perhaps this project is a lot closer to groundbreaking then you allude.

From what little I know about USAA they seem a tad conservative with a southern flavor.

HQ'd in San Antonio, they are Arizona's 46th largest employer with 3,500 employees. Located at 1 Noterra Drive, north Phoenix, they are acknowledged as a great place to work.

Interestingly I see where Patrinely is the developer of their Phoenix campus. It wouldn't surprise me that they're interested in Denver. Whether they've bought the land or arranged some sort of JV, who knows at this point. Certainly a 32 story office building would be a bell ringer for them.

[wong21fr]

Originally Posted by TakeFive

Interestingly I see where Patrinely is the developer of their Phoenix campus. It wouldn't surprise me that they're interested in Denver. Whether they've bought the land or arranged some sort of JV, who knows at this point. Certainly a 32 story office building would be a bell ringer for them.

Patrinely's investment arm, Crimson Group, has a single majority partner in the investment fund: USAA Real Estate Services. It also looks as if they've been seeking other markets outside of their historic focus in Texas. Getting in on the ground floor of a market like Denver, as investment money looks for increased margins away from the coasts, would be a smart move.

[TakeFive]

Originally Posted by wong21fr

Patrinely's investment arm, Crimson Group, has a single majority partner in the investment fund: USAA Real Estate Services. It also looks as if they've been seeking other markets outside of their historic focus in Texas. Getting in on the ground floor of a market like Denver, as investment money looks for increased margins away from the coasts, would be a smart move.

Interesting.

I hear ya but there's still nearly a million SF that's under construction and probably half of that amount available for lease or sub-lease in the CBD. We'll see what happens over the next 18 months.

For grins I looked up floor plate sizes.
1401 Lawrence has 22,000 SF per floor
1144 15th St. has 26,000 SF
Republic Plaza has 50-75,000 SF spaces - dat's a Big Boy there
Proposed building will have 29,000 SF floors

BTW, other than for our lust and fantasies on this thread, I've never thought that Block 162 was likely for some special treatment. 32 stories is actually pretty stellar. Let's hope we don't lose floors along the way.

EDIT: It just occurred to me that if Evan sold the land for the office building, it could have been part of a 1031 tax free exchange into the Cottrell's property. Just an interesting thought.

[DenverInfill]

I'm glad they're putting glass on the convention center side of the new hotel! It could have been much worse.

[EngiNerd]

Originally Posted by rds70

Not true. The facade facing the convention center will have vision glass above the 3rd floor. Here is a piece of the approved elevations:



You can see where it lists vision glass above the 3rd floor.

Well, half of it is stepped back and receive glass, the other half (California side) isn't and will just be EIFS panels it looks like, up to the 20th floor. Still, a lot better than one big blank wall.

EDIT: RDS, do you have the elevation from the Stout street side? Would be curious to see how big the step back really is.

[mojiferous]

Originally Posted by TakeFive

For grins I looked up floor plate sizes.
1401 Lawrence has 22,000 SF per floor
1144 15th St. has 26,000 SF
Republic Plaza has 50-75,000 SF spaces - dat's a Big Boy there
Proposed building will have 29,000 SF floors

Republic Plaza definitely does not have 50-75k RSF per floor. The Brookfield website is broken (I assume that's where that came from, as it's the first piece of information I found too.) It also doesn't have 84 floors.

According to their cached pdf: http://webcache.googleusercontent.com/se...links/1827.pdf+&cd=1&hl=en&ct=clnk&gl=us
floor sizes are actually around 24,000 RSF. So... about 80% of the size of 162.
I'm pretty sure some of the new buildings near Union Station have larger floor sizes.